1996 Quality of Life Optimas Award Profile Hallmark Cards Inc.

Let's admit it: If any company has a right to be a little warm and fuzzy, it's Hallmark Cards Inc. Consider its credentials. To begin with, its core mission, its very purpose for existence, is to promote affection, friendship and love-in the form of greeting cards, gift wraps and party favors (to name just a few products). Very warm. Then there's the family issue: Hallmark started out as and continues to be a family-run business, from its 1910 founding under Joyce Hall as Hall Brothers Incorporated (in the hands of Joyce, Rollie and William) to its current chairmanship under Donald Hall, son of founder Joyce. Very fuzzy. And of course, we can't dismiss the telling sign that the company is nestled in The Heart of America-Kansas City, Missouri, a town that was recently hailed as one of the best places in the United States to raise kids. Sounds like a cute little company, huh?

This cute little company also just happens to be the world's largest greeting-card manufacturer-boasting annual sales of $3.8 billion, ranking it 31st on Forbes magazine's listing of the largest privately held U.S. companies.

A delicious irony? Hardly. Any Hallmarker will tell you it's the company's cozy, homey qualities that provide the real muscle in pushing Hallmark on to the $4 billion mark. That's because it's the warm, friendly atmosphere that attracts the best people-and keeps them carefully snuggled deep in the folds of the company.

It's a theory that holds water. For instance, Hallmark is loaded with literally thousands of Quarter Century Club members-people who have been with Hallmark for 25 years or more. Around Kansas City, the company enjoys a reputation as a peach of a Bermuda Triangle-folks enter its hallowed halls and never want to leave. A recent union flirtation failed because employees simply didn't demonstrate enough interest in changing anything about the company. And why should they? Thanks to a generous profit-sharing program, employees now own one-third of the company.

Is it all becoming too much? Feel overwhelmed by visions of sugar-sweetened greatness? We really haven't even started: Hallmark has scads of offerings that lure and hold the cream-of-the-crop employees. And when you have bragging rights on the best workforce in the industry, that $4 billion sales mark can be a pretty easy reach.

HR at Hallmark is a matter of individuality.Dave Pylipow, director of employee relations and staffing, believes he knows just why Hallmarkers tend to be a satisfied bunch: "The most important thing is that Hallmark employees believe the company cares about them as people."

This nod to individuality manifests itself in a variety of HR standards-beginning with HR policies, one of Pylipow's main stomping grounds. He has a hand in writing them, updating them, and most often, interpreting them. That's because they're constructed to act more as guidelines than very strict rules. Let's say an employee wants a leave of absence not covered by the FMLA. Or maybe a snow storm keeps half the workforce at home while the others manage to get in. Pylipow is more than happy to interpret the company guidelines on a case-by-case basis. "Doing that gives us a great deal of flexibility. It helps our employees and shows we care about them individually," he explains.

Another strong demonstration of commitment to employees turns up, ironically enough, in Hallmark's approach to job termination. Employees know the company doesn't take their jobs lightly. For instance, anyone (at any level) employed at the company for at least two years can't be terminated until Pylipow himself has reviewed the situation. Five years' or more company experience guarantees that an employee's division vice president, as well as the vice president of HR, Ralph Christenson, must sign off. Pylipow says this, in the very least, ensures all sides get a chance to talk.

"Around Kansas City, the company enjoys a reputation as a peach of a Bermuda Triangle-folks enter its hallowed halls and never want to leave."

Just as employees know their jobs won't be snatched away due to a misunderstanding or a simple mistake, they also know jobs at Hallmark don't disappear because of a slow year or a slipping product line: Amid the rubble of today's corporate downsizings, Hallmark stands tall with a no-layoff history. Instead, Hallmarkers at any site that's low on work have several options. First, they can take some time off without pay, with their benefits intact. Other employees can redeploy themselves to work units that need some extra hands: One group of Hallmarkers recently helped paint an operating plant while receiving their standard wages. Finally, employees can opt to do some community activities, also while pulling in their usual paychecks. Why pay folks big money to do things like touch-up painting and literacy tutoring? Pylipow says it all evens out-although there's a temporary cost factor, the sense of goodwill and employee security make it worthwhile.

These general HR standards are backed up by a prevailing atmosphere at Hallmark-one that celebrates the relationship between employees and the company. "A lot of it stems from the style with which our managers manage," says Pylipow. "Managers know that if employees talk to them, they'd better make time to listen. Division heads will walk through the factory and just talk to people. That sends an important message to the managers that you'd better be in touch with your people."

Just as the company encourages sharing information, it also encourages sharing affection and recognition. You can, for instance, imagine the number of birthday cards that exchange hands in the place. But in addition, other tokens of appreciation abound. Whenever an employee or department goes above and beyond the call of duty, there's sure to be some form of congrats, be it gift certificates or passes to a Kansas City Chiefs game.

Then of course, there's the coup de gras of employee recognition: initiation into Hallmark's Quarter Century Club upon reaching 25 years of service, marked by an office celebration to which an employee can invite all his or her company friends. Then, once a year, Hallmark throws a heck of a party for these folks at a nearby posh hotel. All employees who've spent 25 or more years with the company are invited-the 3,100- strong group now comprises almost one-fourth of Hallmark's U.S. workforce. Many retirees fly in especially for the occasion. "It's great," says Pylipow. "It's like a big family reunion." Family. There's that word again.

A family-run business backs family-supportive programs.Every Christmas season, employees are invited to head up to Donald Hall's office to meet the family. The whole Hall clan tends to show up, greeting employees and chatting as toddlers crawl around on the carpet and babies coo back and forth at each other. The whole thing looks like a-well, like a Hallmark card. Who wouldn't expect the family-friendly atmosphere to trickle down through the ranks?

And it certainly does. As Andrea Zeorlin, work and family program representative, explains, "If you walk around here at Hallmark, you can always see family photos. Plus, our products are based on enhancing relationships. It just stands to reason that Hallmark would be supportive of a family-friendly environment." Indeed: The company's strong work and family services department does such a good job helping employees care for their own that in 1995, Hallmark celebrated its 10th year on Working Mother magazine's "100 Best Companies for Working Mothers" list (making a perfect 10-for-10 record). Hallmark's work-life programs also have played a big part in placing it twice in the top 10 in "The 100 Best Companies To Work for in America," by Robert Levering and Milton Moskowitz (see "Robert Levering Tells Why Hallmark Is One of 'The Best'").

The work and family services area, established in 1990, has three main spheres of influence:

Family care assistance

Counseling and education

Alternative work arrangements.

For the family-care assistance arena, the emphasis is on assistance. This is no hearts-and-flowers program by any means. The company has definite business motives behind assisting families. So what the program does, and does well, is help employees make care arrangements they feel good about so they can come to work (physically) and stay at work (mentally).

For instance, Family Care Choices is a service designed solely to assist Hallmarkers in locating care for their children, family members with disabilities and aging parents. Zeorlin says that elder care is one of the fastest growing concerns among employees. To access Family Care Choices' free assistance, all an employee needs to do is pick up a phone. Run by Heart of America Family Services-a non-profit human services program-Family Care Choices assigns a family care specialist to everyone who calls, and that specialist remains the point person throughout the search. "We have some instances in which employees in our rural areas need care," says Zeorlin. "I know the specialists have gone as far as running newspaper ads to find [caregivers]."

But a care service won't cover all needs all the time. Maybe a school takes a snow day, and suddenly an employee's 6-year-old has nowhere to go. Or maybe a child gets ill, and his usual daycare can't take him. This is where Hallmark's emergency back-up care and sick-child care step up to bat. The back-up care program, Moment's Notice, is made possible through a partnership Hallmark struck up with a nearby day school. The school has agreed to keep spaces open for Hallmarkers' kids-all employees need do is call and reserve a spot (the school operates on a first-come, first-serve basis). Hallmark subsidizes a portion of the cost-up to half for children 4 years and younger.

Zeorlin says the sick-child care is one of the most popular services among Hallmarkers. Perhaps it's due to the fact that almost 4,000 employees (of the company's 12,500 U.S. workers) have children 15 or younger. And most of these kids at some point are going to be ill, prohibiting them from their usual daycare or making parents reluctant to leave them at home on their own. Again, Hallmark solves the problem through a partnership arrangement-this time with the pediatric units of six area hospitals where children receive some TLC (as well as hot dogs and popsicles). The first day of care is free; every day after costs only $3 to $3.50 an hour.

Hallmark goes beyond child-care placement, however. As a member of the American Business Collaboration for Quality Dependent Care, the company has access to a resource van. A Hallmarker whose child is at a family day-care home may request that this van stop by. There, kids can sift through a veritable treasure trove of goodies, from science equipment and books, to toys and games. They can check out these items library style, for up to three months. Caregivers also are invited to grab a few things: strollers, cribs, cots as well as resource books.

As much as the company is willing to make employees' lives easier, it continually sends a strong message: Hallmark helps those who help themselves. The company is willing to meet employees halfway, but they're expected to do some of the work themselves. Hence, the company sponsors an abundant array of counseling and education programs. Many of these link back to family situations. One of Zeorlin's favorites just started this past fall. Playfully tagged The Doctor Is In, this program recruited a child behavioral specialist to provide Hallmarkers with twice-weekly onsite consultations. Although the service is fairly new, already more than 60 parents have used it. During the 45-minute one-on-one session (partially subsidized by the company), parents may ask for guidance on any number of behavioral issues, from toilet training and temper tantrums to sibling rivalries and shyness. Zeorlin thinks it may be the only service of its kind in the country. "I'm really excited. People stop me in the halls and say, 'It only took one visit and already it's made such a difference in our household.' Little things like that make you feel so good. You know, you're not giving them a raise or anything, but you're easing something in their family life so they may become more productive in the workplace."

Hallmark's twice-monthly brown bag Lunch and Learn seminars also tackle family topics: from elder-care issues to "Maternity Matters," designed to answer questions about maternity disability or parental leaves. The Lunch and Learn sessions covering parenting issues have been extremely popular, but Zeorlin was getting two main complaints: They weren't detailed enough because of time constraints, and many times the topics dealt with information both Mom and Dad should hear. So Zeorlin introduced quarterly Saturday parenting workshops, which are offered at no cost and open to Hallmarkers' spouses. Recent topics have included "Parenting from the Heart"-on instilling positive values in children-and "The Role of Fathers."

Hallmark continues to help employees on more directly personal levels. The Personal Assistance Program pays the cost for up to four sessions with a trained psychologist for problems such as marital difficulties, substance abuse or emotional and mental distress. Employees who have lost a loved one may enter a company counseling and support group, which offers an informal network. "They know each others' phone numbers and can lean on each other if they're having a bad day," explains Zeorlin. "Then there's somebody there who knows what they're going through."

The final piece of the department's package is facilitating alternative work arrangements. Although the company is just now getting its feet wet in telecommuting waters, for more than 10 years it has offered to arrange part-time schedules for whomever deems them necessary. While part-timers are no new creature to the workforce, Hallmark maintains a strong commitment-not only in encouraging the arrangements, but also in keeping part-timers fully integrated in the workforce. Many women in the company, for instance, have chosen to go part-time-often in a job-sharing capacity-just until their children hit school age. Upon their return to full-time schedules, Zeorlin surveys these employees to ensure they feel they've maintained their career track, and most report positively.

Hallmark has proof of its word. Several of its unit directors are former part-timers. One director currently remains in a part-time capacity. Zeorlin herself works a 60% schedule. (In fact, she gained her current position largely because of her extensive personal experience in job-sharing situations in another Hallmark division-they realized she could be an important liaison between managers and employees who want to play with their schedules.) Finally, Donald Hall himself has offered evidence that non-traditional job arrangements are accepted: His secretary is part of a job-sharing duo. "If he can support and work with a job-sharing team, I think the rest of our managers can do the same," says Zeorlin.

The lines of communication are open.The Kansas City Star puts out the town's most widely received newspaper. Hallmark Cards Inc. puts out the second. And Andy McMillen, internal communications and publications manager, will tell you this isn't just a set of quickly Xeroxed tidbits typed up at the last minute. Noon News is a professionally designed, professionally printed newsletter replete with slick photos and graphics. "When we tell other people in the corporate world that we have a daily newsletter-it just blows them away," he says. "Noon News has been around about as long as I have-40 years-and we crank it out every day. It's not just a tradition. It's an institution here."

Noon News carries the standard newsletter updates, such as anniversaries, births, marriages and promotions. An issue may cover the outcome of the Toy, Clothing and Food Drive that Hallmark sponsored this past holiday season. It may contain several pages of want ads, acknowledgment of blood-drive donors and reminders of health-plan enrollments. It also contains "about as much business news as we can squeeze out of this place," says McMillen, referring to product and financial information.

Supplementing this companywide communication is Directions, a 7-year-old newsletter targeting managers. Both the length and the schedule of Directions depend on the information flow in the company: It can be published as often and can cover as many pages as necessary. Reaching about 1,500 Hallmarkers, the newsletter is published for two reasons: First, it alerts them to information they need to know before it becomes public knowledge; second, it provides a tool for them to use in transferring that information to their work groups.

Directions tends to cover more in-depth company news than Noon News. Twice a year, it offers up the company's financial performance progress. If Hallmark is about to make an acquisition or a divestiture or launch a new product line, that also will warrant an issue. "We'll [cover] just about anything that will be more broadly known soon but that we'd like managers to know about."

Finally, any info that doesn't make it into Noon News or Directions can be disseminated through the dozen computer-monitor signboards sprinkled around the headquarters building. The bottom line: Hallmark has its bases covered when it comes to communication.

But while Hallmark, by its very nature, feels a special niche in reaching out through the written word, the company knows that true face-to-face exchange also is important. One such communication program is Hallmark's CEO Forums, which have been in existence in one form or another for a decade now. Approximately 10 times a year, President and CEO Irvine Hockaday meets with a group of workers for 90 minutes. To ensure pet employees don't dominate the discussions, the attendees are chosen randomly by divisions. And to ensure employees feel free to say what's on their minds, senior management is barred from the meetings. "The forums are purely for midmanagement and below so there's no intimidation factor," McMillen explains. "You can talk to Irv about anything, and you don't have to worry about your VP sitting there taking notes. It's a terrific opportunity for dialogue."

The company tries to keep the forum groups near 50 participants, because with more than that, the sheer mass can make communication a little intimidating, while a smaller group wouldn't allow enough people to take part at a time. "The main purpose is to achieve meaningful two-way communication between employees and the top management. We want employees to have the opportunity to hear directly from their leader what's going on in the company, and we want him to hear directly what's on their minds."

On a similar note, if not a similar scale, are Hallmark's Corporate Town Hall meetings. Initiated just last year, the plan is to host these gatherings quarterly, with three meetings in one day and 400 employees attending each. Again, the main attraction is Irv Hockaday. He is joined by other top management team members when necessary. Hockaday talks for 30 minutes on some company topic and then opens the floor to discussion for the next hour. The two Town Hall meetings held in 1995 both covered basic progress reports. The first, in July, gave an update on the doings of the new management team that started up in January. The second focused on 1995 product goals and initiatives.

These two-way communication efforts give a lot of employees an unusual opportunity to chat with the top figure in their company.

"If you combine the Corporate Town Hall meetings, which reach almost 5,000 people a year, with the CEO Forums, which [reach] another 500, then that's better than 5,000 people a year who have a chance to sit in a room and engage in dialogue with the CEO," says McMillen.

Is there any form of communication that Hallmark hasn't completely saturated? Well, yes. McMillen concedes the company's internal communications are lagging behind in joining the Electronic Age. For instance, currently, only a lucky minority in the building have access to e-mail. In fact, not all employees even have computers. Surprising? Probably not, when you stop and think about it. "We communicate on paper," says McMillen. "That's our business and we do it well, so it's not surprising that a lot of our efforts go into a published or print medium. But we're not ignoring electronic communication."

Another challenge to getting information across to employees is the very corporate culture itself. Because Hallmark has always been under private ownership, there's been a history of reluctance to reveal too much business and financial information, lest it fall into competitors' hands. "When you have decades of that close-to-the-vest behavior, breaking that pattern is very difficult," says McMillen. "But from a communications [standpoint], it's important because Hallmark employees own a third of the company." McMillen admits it's a difficult dance between giving employees the information they're entitled to without revealing too much to hungry adversaries. This restraint is compounded by Hall family members themselves: "The Hall family is a family of few words," says McMillen. "They're not Chatty Kathys-they're terrific people who have a colossal impact in the community in which they do business, yet they aren't quick to talk about or brag about their company, so there's a bit of reticence that translates into the corporate culture."

Still, McMillen says the company has come a long way in its communications efforts since the '80s. He believes the progress is largely a combination of the two-way communication programs along with top management's admission that they need to loosen their grip on the information flow. "Employees receive far more information today than they received 10 years ago," says McMillen. "Far more."

Hallmark builds a multi-layered diversity initiative.Some department has, under one name or another, addressed issues such as affirmative action and equal opportunity for the past 20-plus years. However, it's been only in the past four years that a department specifically concentrating on "corporate diversity" has existed. But the places it's gone in those four years...

To begin with, this department has broadened the traditional boundaries of diversity. At Hallmark, diversity "includes, but is not limited to: ethnic origin, religion, gender, age, sexual orientation, disability, lifestyle, economic background, regional geography, employment status and thinking style." To give these definitions more context, the Corporate Diversity Council (CDC), formed in November 1993 (and comprised of senior management from every division of the company), has articulated a "Business Rationale for Diversity," explaining that diversity sustains Hallmark's competitive advantage: the company's financial success depends in part on its ability to provide products that meet the needs of a diverse and global consumer base.

But, Hallmark, not known for its passivity, didn't want to just place these thoughts on a shelf for good looks. So the CDC identified nine short-term initiatives and programs that will receive attention from 1994 through 1997. Next, it defined an "Ideal Future State" for each. The CDC then conducted a gap analysis to see where Hallmark currently was in relation to the Ideal Future State. It then identified the necessary steps to close the gap and assigned accountability, completion dates and effectiveness measures.

There are nine initiatives:

Education and Training

: Two courses specifically address diversity. The Managing Diversity Workshop is a required session for managers. Accepting Differences is required diversity-awareness training for employees. Managers have been trained to teach the course to their own divisions.

: Managers are encouraged to talk with employees about performance, objectives and future goals. Hallmark also encourages mentoring relationships by division.

Management Style

: Management must be able to work with a diverse group of people; programs are in development to support this goal.

HR Policies, Compensation and Benefits

: Hallmark is conducting a pay equity audit, and a complete review of benefits and policies is in the works.

Commitment to the Business Rationale

: Hallmark commits to supply the necessary resources to make diversity a top priority.

Developing Ongoing Assessment Tools

: Hallmark is creating a process that reports monthly to the chairman of the CDC on progress in various diversity components.

Employee Involvement.

Obviously, employee involvement is a big piece of a diversity program. It's the employee involvement initiatives that Mary Towse, director of corporate diversity, will be setting her sights on in 1996. Let's just say she'll have a busy year. To begin with, there are the Division Task Forces, now mostly in start-up stages. These groups focus on diversity efforts within their own areas. "Diversity has to be owned by line management," says Towse. "It can't be viewed as an HR function or nothing will happen. This is a means of pushing it out."

But also gaining steam is the Hallmark Multicultural Exchange (HME), which serves as a bridge-building and service organization. The group's mission is to promote recognition of minority contributions in the workplace and community. It also sets out to provide opportunities for professional and personal development and social interaction among its 100-plus members. In 1995, the organization sponsored such events as a basketball-competition fundraiser for the Kansas City Parks and Recreation program and Mother's and Father's Day projects with area nursing homes. There were also plenty of development courses, such as internal resume preparation and interviewing skills. The big selling point of HME is it's a grassroots employee organization, entirely self-run with the help of an operating committee and a chairperson who's elected every year. "I think it's one of the neatest organizations we have here in the company," says Towse. "If you go to a meeting, you'll see people in custodial uniforms sitting next to vice presidents. The idea is that if you bring people of difference together and they get to know each other, bridges are built."

Also in the works for '96 is the formation of networking groups for people who share common interests and concerns: women's groups, ethnic minority groups, even white male groups. As long as the networks support Hallmark's corporate values and objectives, Hallmark will support them (no militia groups need apply). "Our sense is that the best ideas come from grassroots," says Towse. "We feel strongly that these kinds of [networks] need to happen, but everything I've read says they need to form on their own. I think the answer is to give corporate sponsorship to communicate the company is supportive of the process, and then I think they'll form."

Spreading the diversity message at all levels will likely deter a repeat of an ugly 1990 incident at Hallmark: Several minority Hallmarkers, mostly African-American men, were targets of anonymous hate mail delivered through the interoffice mail system. Hockaday issued a strong statement in Noon News immediately, promising a speedy dismissal for the culprit. Unfortunately, the sender was never found. "It's the kind of thing you hate to think would happen anywhere, but when it happens under your nose, it's absolutely horrifying," says Towse.

Counseling was made available to those who had received the hate mail, and Hallmark rallied to action. "It's almost like a case study of how a company responds to a crisis," says Towse. "The company responded exactly the way it needed to, but something like that always leaves permanent scars."

Yet the gains of diversity within Hallmark should help the healing. In the past few years, three women were promoted to corporate officer level; six women were promoted to senior management; two African Americans were promoted to senior management; and one African-American was promoted to vice president; the Board of Directors was expanded to include a woman from the creative community and a man of Hispanic heritage.

In addition, the company is addressing diversity among external groups it has dealings with. Its Ethnic Business Center creates products for African American and Jewish consumers. And its Minority and Women Supplier Development program is closing in on its 30th year. The program focuses on all suppliers to Hallmark-with the goal that 5% of total purchases be placed with minority suppliers.

Often, a team of Hallmarkers will work with the supplier to identify the challenging issues. If the supplier needs help developing a computer system, the team might get someone with an information technology background to help. The supplier program is personally championed by Donald Hall, who started the program himself 27 years ago. In addition, his son, David Hall, sits on the Corporate Diversity Council. In fact, it's the continued upper-level support of her department's efforts that Towse truly appreciates. "I don't know that everyone in my position has that kind of support. It's just unquestioned that the company is behind diversity."

As far as continuing the complete cultural transformation required to support diversity 100%, Towse is proud of Hallmark's current status. She believes that by continually building awareness, a mass of change agents eventually surface, who each go out and make a difference in their own sphere of influence. "A process of cultural change doesn't come easy," she says. "It's like turning a very big ship. Hallmark historically has had a wonderful culture in so many ways, we feel we want to go at it with a laser, because there's so many things we don't want to change."

Towse highlights a concern that seems a common theme at Hallmark: How to keep growing and getting better, without sacrificing all the qualities that make it such a great place to work. But as far as conundrums go, this isn't such a bad one to have. How many companies can have so little to improve upon that they actually begin to worry about change negatively impacting the current culture?

"We're just lucky here," says Pylipow. "There's a sense of respect in the way we do business, and it's just a good place to work. Hallmark hopes to be a good example for other companies to follow in terms of really taking advantage of the relationship between the company and employees, and making it as mutually productive as possible. Then everybody wins."